Divorce drastically alters the financial situations of most couples and requires them to make significant adjustments to transition to life as single people. For spouses who make much less than the other partner, or curtailed their own career development in favor of raising a family, this event is particularly hard to manage. While the spouse with less income and/or fewer resources may receive child support to help mitigate the costs of the child’s needs, if children are shared, this does not necessarily provide enough financial assistance to maintain a reasonable standard of living. Indiana does have a version of alimony, known as spousal maintenance, that a party can request in certain circumstances, but the situations in which this support is available are more limited compared with other states. A recent change to the tax code, as part of the congressional tax reform package, is likely to make obtaining spousal maintenance even more difficult if spousal support is an issue in settlement negotiations. A discussion of when Indiana courts will consider awarding spousal maintenance, and the likely influence of the new tax law on divorce settlements, will follow below.

When is Spousal Maintenance Available?

Generally, spouses who divorce are expected to support themselves once the marriage is dissolved, so provisions related to spousal support require evidence of significant hardship before it will be available. Specifically, Indiana law will permit courts to award spousal maintenance in three limited situations:

• A spouse is physically or mentally incapacitated, and consequently unable to generate a sufficient amount of self-support;
• A spouse lacks adequate financial resources to support him/herself, and is unable to work due to being primarily responsible for the care of a special needs child; or
• A spouse stopped working or aborted educational opportunities to stay home as a parent or homemaker, and support is necessary to acquire the training and skills needed to find adequate employment.

In the first two situations, spousal maintenance may be ordered indefinitely, but for the third, the support is only temporary, and will last no more than three years, though it is usually limited to the time the divorce is pending. To find a need for spousal support in the last instance, the court must specifically consider the following factors before awarding maintenance:

• The level of education attained by each spouse at the time of the marriage and when the divorce was filed;
• The earnings capacity of each spouse, including employment skills and work history; and
• How much time and money are needed for a spouse to acquire employable training and skills.

However, the ability of a spouse to pay is also a factor in this equation, and awards that would leave a payor unable to support him/herself, usually an amount that would exceed 50% of a payor’s income, would not be enforced.

Impact of Tax Reform

Currently, former spouses who pay spousal support may deduct this expense from their federal income tax obligation, and individuals receiving such support are required to report it as income. Starting in 2019, this deduction will no longer be available, which will take a valuable benefit away from parties paying support, and make it more expensive to absorb this cost. As a result, higher-earning spouses are less likely to agree to pay spousal maintenance in settlement negotiations, or go to greater efforts to scale back how much they provide. This motivation to push back harder against paying spousal support will likely have significant negative consequences for a spouse with less earning power, and make it even more critical to secure a sufficient share of the marital property to account for a lack of direct monetary assistance.

Get Help

Getting through the financial adjustments of divorce is no small matter, and to ensure you are left in the best possible position, working with an experienced divorce attorney is essential. Christopher L. Arrington, P.C. understands the issues you are facing, and will diligently strive to reach an amicable and fair resolution. Contact the Dansville law firm to schedule an appointment.